Challenges of liberalization. The case of Polish electricity and gas sectors

This paper applies the general insights of liberalization of the electricity and gas market to the market conditions of a particularly important new Member State in the EU, Poland. To this end the aim of this paper is to explain the Polish experience of liberalizing its energy market by reviewing those developments that produced its current shape. In fact there are two possible scenarios Polish policy makers can follow in liberalizing its energy sector. One would involve the UK approach that encompasses: ownership unbundling, less market concentration, less public ownership and more private capital in the industry. The second scenario follows the continental model: more concentration and vertical integration and more State or public ownership in the energy field (for instance, the French model). These two widely diverging approaches reflect different energy consumption patterns, energy mixes, sources of supply and natural resources of various countries. Having these differences in mind this research reviews developments that have produced the current state of liberalization of the electricity and gas sectors in Poland and discusses the prospects for further progress towards an integrated, competitive and liberalized European electricity and gas market in the light of the challenges that remain. These challenges include uneven unbundling, discriminatory third party access, insufficient independency of national regulator, consolidation and anti-competitive behaviour of incumbents or abuse of one’s dominant position on the market.

European Commission, Report on Progress in Creating the Internal Gas and Electricity Market, SEC(2005) 1448.

European Commission Staff Working Document. Implementation Report – SEC(2006) 1709, page 136. Accompanying document to the Communication from the Commission to the Council and the European Parliament – Prospects for the internal gas and electricity market – COM(2006) 841 final. Available at: http://ec.europa.eu/energy/energy_policy/doc/10_internal_market_country_reviews_en.pdf

Goldberg S., “Recent developments in the European Union energy sector” (2008) European Energy Review published by Herbert Smith LLP in association with Gleiss Lutz and Stibbe.